Cryptocurrencies Are Volatile, but Are They a Bad Investment?
The average stock market investor sees volatility as a red flag. They tend to avoid investing in such stocks in most cases they are even proved right in not doing so. But the stock market is a completely different world from the Cryptocurrency market. There are lots of differences if we sit with a magnifying glass, but the point I am trying to make here is that investments in these two markets can hardly be compared through the same lens.
So if volatility doesn’t seem good for the stock investor, is it a problem for the crypto-investor too?
The answer is no. But there are complexities as usual because the Cryptocurrency market has never revelled in being a simple one.
Why does volatility have a bad name?
Changes are difficult to accept. They can often be painful too. Anything that is volatile means that it changes very often. This is the biggest reason why people do not like volatility in the investment market.
Cryptocurrencies like Bitcoin, Ethereum, Litecoin and all the 1000 plus coins in the market continue to see changes in their value which makes it difficult for investors to identify the right time to invest. You cannot invest in a Cryptocurrency and be sure that its value will surely rise in the next month or in a fortnight. The nature of the Crypto-market is mostly unpredictable.
Are we missing the big picture?
But pick a coin and look at its overall change since the time it was launched. For a major fraction of the coins, you will notice an upward trend. A trend that may see certain ups and down in a short span of time, but overall, most Cryptocurrencies tend to grow.
I keep checking ICOs through this ICO review website for new tokens that will soon be available on the exchange and then check their growth after a certain span of time. A lot of them have shown a positive trend on the graph.
What does this mean for a Cryptocurrency investor?
Don’t make quick assumptions about your investments in a short time. While the Cryptocurrency market is volatile, most coins have grown in value since the time they were launched. The value of Bitcoin often plays a role in the changes of value that other coins experience. But there are lots of other factors like the changing laws of different countries which are either embracing or banning Cryptocurrencies.
If you are new to Cryptocurrency investments then you may find the volatility of the market to be somewhat overwhelming. But those who have been a part of this network for a long time are already accustomed to the changes.
Understanding graphs and trends are a great place to begin for investors. It will help you analyse the historic changes and notice similarities in the current changes. You can also find informative blogs and websites to help you understand the market better. This cryptocurrency website has a lot of comprehensive information related to Cryptocurrencies for beginners and professional investors.
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